We took a position in gold via the GLD ETF when it broke out but we neglected the miners, which had the better move. We suggested taking a position in the miners ETF GDX on the first pullback after the break out. We did this because we were unable to discern which miner would have the most favorable move.
Today it's clear that Randgold Resources (GOLD) has been the star performer amongst liquid, institutional quality mining stocks. As the price of gold has corrected the stock prices of miners have come in all the more.
This morning GOLD has gapped down to its 20 MA in what has thus far been a constructive pullback. It is attempting to turn there. We would buy the stock on a move over the high of the day at $69.57 and swap out of the GDX. Our stop will be a break of the low of the day.
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Lying with Statistics: the September Jobs Report
12 years ago
Well, that was a quick loss.
ReplyDeleteWe're not suggesting being gluttons for punishment but we believe the move in gold is still valid. The G20, which is holding its meeting today and might announce support for the dollar, and Fed announcement earlier this week have clearly thrown gold into a correction.
Just the same we point out that GOLD is coming into an area of major and minor support in the mid-$67 area. We do not advocate blindly reentering the stock. But note if price finds support there. We would not be averse to taking a position on a solid bounce and close.
One more very important point. The break out in gold is holding up. As long as it does the miners remain valid reversal candidates.
ReplyDeleteWe are still believers in gold and thus GOLD. After two reversal candles the past two sessions price gapped up this morning and took out its gap up low. We'd buy a move over the early highs with a stop under the lows of the day.
ReplyDeleteCall us stubborn, but we believe this is technically the best positioned liquid miner.